RATIO CALCULATION

Category Types Year 2016 Year 2015 Year 2014

Liquidity Current 1,520,000 670,000 340,000
1,900,000 620,000 280,000
Ratio
(short
= 0.8x = 1.08x = 1.21x
term 115,944,000−35,170.000 115,944,000−35,170.000 115,944,000−35,170.000
solvency) Acid Test
180,545,000 180,545,000 180,545,000
or
= 0.48x = 0.79x = 0.93x
Quick
Ratio

RATIO ANALYSIS, CHART/GRAPH AND INTERPRETATION

Liquidity (Short Term Solvency)

Liquidity (Short Term Solvency) In Teguh

Berhad From 2014 To 2016
1.4
1.2
1
0.8
Times

0.6
0.4
0.2
0
Current Ratio Quick Ratio
Axis Title

2014 2015 2016

The current ratio is a liquidity ratio that measures a company's ability to pay short-

term and long-term obligations. To gauge this ability, the current ratio considers the current

total assets of a company (both liquid and illiquid) relative to that company's current total

liabilities. In 2014, current ratio of Teguh Bhd was 1.21x, which mean for every RM1 in current

liabilities, the company has RM1.21 current assets. In 2015, current ratio of Teguh has 1.08x,

which mean for every RM1 in current liabilities, the company has RM1.08 current assets. The

ability of the firm to meet its short-term financial obligations was decreased by 0.13x. On the
other hand, current ratio of Teguh Bhd was 1.08x, which mean for every RM1 in current

liabilities, the company has RM1.08 current assets in 2015. In 2016, current ratio of Teguh has

0.8x, which mean for every RM1 in current liabilities, the company has RM0.80 current assets.

The ability of the firm to meet its short-term financial obligations was decreased by 0.28x.

The quick ratio or acid test ratio is a liquidity ratio that measures the ability of a

company to pay its current liabilities when they come due with only quick assets. Quick assets

are current assets that can be converted to cash within 90 days or in the short-term. In 2014,

quick ratio of Teguh Bhd was 0.93x. In 2015, quick ratio was 0.79x. The liquidity was

decreased by 0.14x. This mean that the company cannot meet its current debt obligations

without selling inventory because the quick ratio of both years is less than 1x. On the other

hand, quick ratio of Teguh Bhd was 0.79x in 2015. In 2016, quick ratio was 0.48x. The liquidity

was decreased by 0.31x. This mean that the company cannot meet its current debt obligations

without selling inventory because the quick ratio of both years is less than 1x.